Rumor Additional Six Flags Parks Up For Sale?

[CedarFairGuy]

This would be an interesting development but, overall, also not surprising. The sale of the SFA land and the 7 parks to EPR to be ran by Enchanted/Burke only put a small dent in FUN's debt load. Of course, liquidating alot won't necessarily save them but it does remove expense lines from their books still. They have a lot to pay down and they want to focus their expenditures on the larger parks. It makes sense. Everything didn't work out the way they wanted to with the merger and this is where it ends up. It honestly might be better this way for all parties involved if more were to be sold though (except for SF season pass holders who want access to more parks).

We went from a period of consolidation of the big players to two of the biggest players merging, and now downsizing. Then we see the appearance of newer-comers in Enchanted Parks while Herschend has significantly expanded with Universal now getting into the smaller park game too.

With that said, the mention of Enchanted Parks adding more parks if this season and next season go well...I have always felt like adding another park or two was in reference to Darien Lake & Frontier City (plus Hurricane Harbor Oklahoma City). The contract runs through next decade but they could save some money by getting out of the contract and Enchanted Parks could come in with 40 year leases for the parks like they did with the others. Sure it won't be saving a lot, but it will help streamline everything a bit more for the chain.

The only other park in the chain that is operated under a lease (that isn't a limited partnership like Texas Flags Ltd., which is at least majority owned and managed by SF) is Six Flags Mexico. I see this contract a little harder to shed than the ones above as the land is owned by the Federal District of Mexico City and they don't have the option in their current state to try to buy the land like they did for CGA.

As for the rumor that Herschend was at Fiesta Texas. I could see it. I'm also shocked that Fiesta Texas wasn't among one of them getting a park president because they had one of the best out there! Enchanted had visited the properties they eventually got with EPR back in December. In January, they started the trademarks. Then we had our announcement in March. Herschend just went through a major expansion and then got Silverwood as well.

However, I do believe that Dorney, KD, and Fiesta Texas would fit well within their portfolio. Discovery Kingdom would work well in the United Parks portfolio but please, for the love of all things sacred, don't purchase any parks until you get your stuff figured out at your own present properties first!!

It's also entirely possible that we don't necessarily see any more sales. Maybe the parks that are getting presidents back are ones that need it while the other ones are operating fine. It's all fun speculation but the development of another sale or two wouldn't surprise me. I'm just not sure if it would be something they would knee-jerk. They may want to wait and see how things shake out this season before making a decision.

 

[Zachary]

So, thought.

Here's our list of suspicious candidates based on the lack of park presidents, right?

• Discovery Kingdom
• DorneyPark
• Fiesta Texas
• Kings Dominion
• Mexico
• New England

Of these, Dorney, Kings Dominion, and Mexico all very recently received coasters. New England debuts a coaster this year. Fiesta has received a strong parade of investment for years and has additional cap-ex allocated for next season in the form of a new coaster.

Aside from Discovery Kingdom, all of these parks have been or are currently experiencing a "pump," in a theoretical "pump and dump" scenario, right? Fiesta's crazy tear of new attractions and significant park improvements probably can't continue forever under the new Six Flags that needs to prioritize parks with even higher ceilings—including its Texas neighbor. Dorney's Iron Menace bump and Kings Dominion's Rapterra bump have likely made their financials look better than they have in years. Don't know how big Mexico's family boomerang was or how big New England's new coaster will be this year, but both are coming off of or currently experiencing a hype cycle.

I could imagine that Six Flags is looking at their 5 to 10 year plan and, given the amount of work and cash that will be required to turn around the biggest Six Flags parks, the chain could reasonably conclude that these lesser parks will be left to languish. Right now these less-focus-worthy parks (sans Discovery Kingdom) are likely showing returns/immediate term forecasts that are higher than Six Flags projects they will be under another 5 to 10 years of limited investment. I can definitely imagine where offloading these assets now—while they look REALLY healthy to a potential buyer—is a far better choice than hanging onto them and letting them stagnate—a plan that will just lead to more issues the company has to solve down the line. That's how Six Flags ended up with all of these neglected, difficult to turn around assets to begin with.

And then there's Discovery Kingdom. No idea what's happening there. That being said, if I were John Reilly—particularly with his background at SeaWorld Parks & Entertainment where he watched Blackfish absolutely destroy the company—the very first thing I would have done as Six Flags CEO would have been to call literally anyone and everyone desperately trying to offload that ticking time bomb of a park. Who cares if you make a profit? Who cares if you rule the market? A marine life amusement park in San Francisco? A park with an INSANELY SKETCHY animal care legacy? Run for the fucking hills, Six Flags. You're literally one viral TikTok, YouTube expose, or Netflix docudrama away from financial disaster with that place.

 

[warfelg]

Aside from Discovery Kingdom, all of these parks have been or are currently experiencing a "pump," in a theoretical "pump and dump" scenario, right? Fiesta's crazy tear of new attractions and significant park improvements probably can't continue forever under the new Six Flags that needs to prioritize parks with even higher ceilings. Dorney's Iron Menace bump and Kings Dominion's Rapterra bump have likely made their financials look better than they have in years. Don't know how big Mexico's family boomerang was or how big New England's new coaster will be this year, but both are coming off of or currently experiencing a hype cycle.

The scale of the bump being wildly different is interesting too. Rapterra was a huge project (comparatively) to Mexico and NE's bumps (minimally themed small family friendly rides) with Dorney falling somewhere in the middle. Feels like maybe they are setting up a 'mini-chain' to be sold that's already tiered for a new buyer.

 

[MaxxForceFan]

Herschend is more than welcome to “grab” Kings Dominion.

It would make a future merger between Six Flags and United Parks much easier if Kings Dominion and Fiesta Texas were sold.

 

[Zachary]

It would make a future merger between Six Flags and United Parks much easier if Kings Dominion and Fiesta Texas were sold.

Don't speak this evil into the world!

Also, Sesame Place and Dorney for Philly though. Definitely some removal of United/Six Flags competition if those three were sold.

 

[Thriller]

Kings Dominion is one of the most beautiful nicest regional parks in the country IMO. With its current isolated location it feels like a resort getaway.

The large population north of the park and the high traffic on I 95 give this park a potential high customer base.

It park could thrive under the proper ownership that understands, there are a lot more customers out there than just thrill, riders and little children, and would install other attractions to attract new customers

However. Herschend has a pretty big debt load right now. At what point do they over extend themselves to where they cannot improve the parks? Overextension is the downfall of too many companies.

 

[mtorange]

Hypothetical: would a potential sale of KD to Herschend stop the current sale of its excess land?

 

[Zachary]

Hypothetical: would a potential sale of KD to Herschend stop the current sale of its excess land?

I imagine so? I imagine the land is worth more bundled in a sale with KD than sold separately.

 

[warfelg]

How does Herschend do with their extra land in other properties?

 

[mtpelepele]

That's probably kind of early to answer, their portfolio hasn't been that large for that long, but at least with Dollywood and SDC, resorts.

 

[northdetective]

And then there's Discovery Kingdom. No idea what's happening there. That being said, if I were John Reilly—particularly with his background at SeaWorld Parks & Entertainment where he watched Blackfish absolutely destroy the company—the very first thing I would have done as Six Flags CEO would have been to call literally anyone and everyone desperately trying to offload that ticking time bomb of a park. Who cares if you make a profit? Who cares if you rule the market? A marine life amusement park in San Francisco? A park with an INSANELY SKETCHY animal care legacy? Run for the fucking hills, Six Flags. You're literally one viral TikTok, YouTube expose, or Netflix docudrama away from financial disaster with that place.

Forgive my ignorance but the SFDK wikipedia page lacks a "Controversy" section. Is there a particularly bad history there? (I'm nervous it would leave Great Adventure's safari in a weird position to be the only zoo/animal attraction in the chain. It can't be cheap to maintain and I (purely guesswork, could be very wrong) doubt the safari itself makes a big profit)

 

[Tacky3663]

My one question is

Is their plan really to pay off $5 billion in debt with the revenue from 10 parks?

 

[Zachary]

Forgive my ignorance but the SFDK wikipedia page lacks a "Controversy" section. Is there a particularly bad history there? (I'm nervous it would leave Great Adventure's safari in a weird position to be the only zoo/animal attraction in the chain. It can't be cheap to maintain and I (purely guesswork, could be very wrong) doubt the safari itself makes a big profit)

Perhaps we need a new thread for this (feel free to quote this post to a new thread in the SFDK forum if you want to continue the discussion), but the history of the place is absolutely fucking wild—not in a good way.

General overview by a local:
https://www.sfgate.com/sf-culture/a...ca-usa-six-flags-vallejo-history-16392744.php

Employee accusations + coverage of a USDA report finding the park responsible for the death of two dolphins due to poor care in 2014:

https://www.courthousenews.com/workers-claim-six-flags-neglects-its-animals/

Accusations of insane understaffing risking guest safety in 2010:

Ex-employee says Six Flags not prepared for dangerous animal escape; park disputes accusations

Ex-employee says Six Flags not prepared for dangerous animal escape; park disputes accusations

www.mercurynews.com

Investigation (with video) of the park's elephant contractor from 2013:

ADI’s Undercover Investigation of Animal Trainers Have Trunk Will Travel

web.archive.org

And the place only stopped public elephant rides in 2016. Twenty Sixteen.

Theme Park Crazy covered some of the more insane shit in the park's history where there's photos and video available (like making an elephant and a lion water ski) and touched on some of the outright animal cruelty and obvious abuse that has been reported over the years as well in this video:

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If the place was half as notable as SeaWorld and hadn't changed names repeatedly, it would have been decimated in the media years ago. The history is fucked—infinitely worse than anything ever exposed at SeaWorld by Blackfish—and having visited the park, it certainly doesn't feel to me like the place has modernized to anywhere near the standards SeaWorld very much has.

I know the mid-twentieth-century history of zoos and aquariums in general is rough and I know the history of destinations mixing animals with larger amusement facilities is even worse throughout that era, but what relatively little research I've done into the history of Six Flags Discovery Kingdom/Six Flags Marine World/Marine World Theme Park/Marine World Africa USA has always surfaced stuff I think even looks totally shocking in the context of its time.

 

[Jazma]

No, the idea is not to pay down the debt with ten parks. They can have debt. They have always had debt. The goal is to get the leverage right, probably more around 3 billion in debt from the current $5.1 billion. They cannot pay a dividend if they wanted to due to the leverage. Also, people need to remember both companies took on a lot of debt during COVID. I can at least speak with certainty with Cedar Fair, as I was investor during that time, and have been for over 25 years. They continued to pay their employees for cleaning in the hopes parks would open in a couple of weeks. I was at KBF the day they closed for COVID, and I was there two years later when they finally got State clearance to reopen. They did the right thing there for employees and their families, keeping them on payroll and keeping them busy fixing, cleaning and pivoting to food festivals, etc. But they also increased their debt load, and then merging you just combined two companies debt. One can only kick the ball down the road so far, and coupled with rising interest rates, inflation, tariffs and everything else we are all facing, it's just too much even if the true plan was to operate 42 parks. There is a lot of talk on forums of how the company always does the wrong thing, but I applaud them for how they continued to pay employees during the pandemic. Legacy CF never went bankrupt as legacy SIX did (twice I believe.). That's an easy cop out to let others get screwed and be left holding the bag. They stuck it out and tried to pay their debt. I hope others get out there this season and join me in the parks supporting them so they can continue to do just that....pay down the debt load so that money currently going to interest can go to more employees and new attractions.

 

[warfelg]

Also, people need to remember both companies took on a lot of debt during COVID.

Not to get too political here - but given that so many businesses got PPP loans for this time period (and subsequently got them dismissed), does anyone know if they used them or explored that route? Because it seems a lot of companies utilized this loan system to avoid taking on too much debt (and instead putting it on us taxpayers).

 

[Jazma]

Good question. I don't ever recall seeing anything mentioned in the annual reports or releases. Not sure if it would be there though but they do release when they refinance debt, just not always who the lender was. But, without going back to research it, just off vague memory, the main debt CF took on was Paramount Parks purchase....that was like $1.3 billion in debt at the time, and they continued to service that and pay a distribution until the Great Recession hit, then had a bad year or two, then things came. back and we all know under Ouimet things seemed to be firing on all cylinders through most of the 2010's. Then COVID hit, debt increased significantly. And the distribution stopped, never to return. I didn't follow legacy SIX and never was invested in them as the two treks through bankruptcy scared me off, but with the merger they got up to $5 billion in debt, where they are now. If I recall correctly, legacy CF was up to almost $3 billion in debt on their own. Had they not merged I wondered what they were going to do as a LP they were required to pay out excess profits as a distribution but had not restored it due the high debt leverage. It's one of those things you wish you could look into an alternate reality and see where the parks would be had it not been for the pandemic. Much like one wonders had the oil crisis in the 1970's not have happened, how would the regional parks have fared keeping past expansion plans that were canceled, never to return?

 

[warfelg]

Good question. I don't ever recall seeing anything mentioned in the annual reports or releases. Not sure if it would be there though but they do release when they refinance debt, just not always who the lender was.

I mean, I'll say this from my perspective - massive props if they didn't take one and dismiss it. But looking in the rearview, even though it's drop in the bucket, it could be an every penny matters (due to interest etc).

 

[Jazma]

Again casually, just as a citizen I recall there being terms and conditions to taking those loans...guaranteeing a certain amount of jobs for so long right? Some parks could not open for a loooonnnng time like California. Others closed early....I went to WOF twice that year in 2020 when you needed reservations and parks closed early....season then cut short as they shipped workers off to CP to finish the season, Halloween events scaled back or canceled altogether. We thought we were just going home for a couple of weeks. And yes, I agree with you on the interest. They recently refinanced like it was a great thing, but did so at like double the interest. I get its the times we are in, but if you or I did that, a financial literacy planner would be scolding us for consolidating lower rate debt with higher!

 

[warfelg]

I recall there being terms and conditions to taking those loans...guaranteeing a certain amount of jobs for so long right?

IIRC multiple companies and people who owned companies took loans multiple times. And of course after the fact we're finding that there was a lot of fraud with these. I think all you had to really show was it was to cover payroll based on lost income. IMO, PPP loan rules were very hastily written and rife for issues.

And yes, I agree with you on the interest. They recently refinanced like it was a great thing, but did so at like double the interest. I get its the times we are in, but if you or I did that, a financial literacy planner would be scolding us for consolidating lower rate debt with higher!

Yea that part is confusing. It makes sense is if the total payments with lower rates was more than the consolidated with the higher rate. Often times business finance with consolidating debt is different from personal debt.

End of the day, I think in a few years this could potentially be an interesting case study for merger finances. Given the sale of land, parks, and other things I really wonder if the plan was to always merge and downsize to the scale that LSF/LCF was prior to the merger. Thinking about it, I wonder if each company planned to do that on their own, realized it would leave them too lean (not enough top end parks, too many lower level parks), and saw merger then dump as the move forward.

 

[rswashdc]

It seems like UP would outbid anyone for KD if it goes up for sale. UP can get some serious pricing power in VA, and this sale wouldn't likely run afoul of regulators.